Author: Oli Sherlock, Goodlord’s Director of Insurance
The Renters (Reform) Bill will bring significant changes to how landlords, tenants and agents interact with one another in the private rented market – you can learn more about all the proposed reforms in our resource hub. However, the Government needs to clarify how these crucial measures will work in practice. Here are some questions that we believe remain to be answered, as we await the second reading of the bill.
The transition to periodic tenancies will significantly affect students and student landlords due to the seasonality of student renting. This will create issues such as void periods over the summer and replacing student tenants if they move out midway through the year.
This may encourage student landlords to focus instead on marketing their properties to professionals. This will indirectly reduce the supply of student properties – as was the case in Scotland in 2019.
Many landlords are already questioning the financial viability of remaining in the sector, and struggling with existing and planned changes, such as EPC requirements.
It will be vital to keep new, additional fees low (such as the cost to join the Ombudsman and the property portal), while ensuring new rules and systems are as easy as possible for landlords to comply.
For agents looking for ways to reassure their landlords, you can download this free talk track.
More and more landlords are requesting a guarantor before a tenant rents a property. However, under the new periodic tenancy system, the role of the guarantor is unclear.
With no fixed-term contracts, will the guarantor have to guarantee the property for its lifetime? This may have long-term implications that need to be considered carefully.
The new ombudsman and proposed property portal will create new regulatory and compliance responsibilities for local government and the courts. While the processes should be more automated, there will be a need to recruit and train hiring enforcement officers to keep up with regulation.
The abolition of “no fault” section 21 evictions and changes to the grounds for repossession (section 8) will also likely drive further cases to the courts, bringing real questions over whether the already overloaded judicial system can cope.
Much of the legislative framework for the private rented sector dates back to the 1990s, long before digital technologies became widely used. Since then, tools like open banking and e-Money have helped transform multiple industries, enabling innovation and enhancing productivity.
The Government should use the bill as an opportunity to update the rules so that tenants, agents and landlords can benefit from these technologies.
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The views expressed in this content are solely those of the author alone and do not necessarily represent the views of TDS, its officers, or employees.